Philanthropy Turned to Short-Term, Project Funding During the Recession

No matter where I go in this great country of ours, when I’m talking with leaders of nonprofit organizations, I hear regularly about their intense frustration with grantmakers that are unwilling to provide unrestricted general operating support and multi-year grants.

“Don’t they have any faith in our work? Must they micromanage/dictate everything? Do they think they know this community/field better than we do?” they ask.

I wish that the latest research from NCRP’s crack research and policy staff had some good news for them, but it does not.

Quick look at the numbers

We examined new data from 2004-2010 for the newly released (and revised) “The Philanthropic Landscape: The State of Multi-Year Funding” and found that reported multi-year grantmaking in 2009 fell 21 percent to $5.5 billion during a time when total grantmaking declined only by 13 percent. If we excluded the Bill & Melinda Gates Foundation, the nation’s largest grantmaker, from the analysis, the drop becomes pronounced at more than 33 percent.

General operating support from 2008 to 2010 fared slightly better. In “The State of General Operating Support,” we noted that reported core support dollars increased 34 percent but the share of such grants remained unchanged at 16 percent of total giving compared to a similar analysis of data from 2004 to 2006.

Other key findings noted in the studies include:

Ninety percent of sampled foundations either do not provide multi-year grants or don’t report them.

Multi-year grant dollars comprised as much as 75 percent of the total giving of those foundations that reported providing such support.

General operating support increased as a share of total giving among family and operating foundations, and among foundations based on the West coast.

General operating support increased as a share of total giving most among foundations granting between $5 million and $10 million.

Most funders reported less than 10 percent of grant dollars as general operating support.

Top funders

The three foundations that awarded the highest percentage of their giving as multi-year grants in 2009 were The William T. Grant Foundation, the James S. McDonnell Foundation and the Richard M. Fairbanks Foundation, Inc.

The top multi-year funders by amount for multi-year giving in 2009 were the Bill & Melinda Gates Foundation, Ford Foundation and The Robert Wood Johnson Foundation.

The largest general operating support funders by amount in 2008 to 2010 were the Gates Foundation, The William and Flora Hewlett Foundation and Ford Foundation.

The Robert W. Wilson Charitable Trust, The Richard and Helen DeVos Foundation and The American Art Foundation were the three largest foundations that reported 100 percent of grant dollars as general operating support.

The Philanthropic Landscape

These are the findings from our new series of fact sheets titled “The Philanthropic Landscape,” which provides analyses of key giving trends among U.S. grantmakers. These and our other reports are available for free at www.ncrp.org.

We hope that our findings inspire more funders to consider how these two very basic but effective ways to strengthen their grantees can be part of their grantmaking strategies. Our communities will surely benefit from having strong, successful nonprofits.